Case Brief
Union of India and Ors v. M. Aslam and Ors – Appeal (crl.) 1039-1040 of 1999, Appeal (civil) 1041 of 1999
Deciding Authority
Supreme Court
Name of the Judges
G.B.Pattanaik, B.N.Pattanaik JJ.
Date of Judgment
4th January 2001
Facts of the Case
Appeals are against the orders of different Central Administrative Tribunals. The respondents are the employees of the Unit- Run-Canteens which provide canteen facilities to the troops at the unit level. Applications before the Central Administrative Tribunals were filed by these employees claiming benefits as regular defence personnel employees or at least as civilian employees serving under the Ministry of Defence on the allegation that the Unit-Run- Canteens are part of the Canteen Stores Department and since the Canteen Stores Department forms a part of the Government in the Ministry of Defence there is no reason as to why the Unit-Run-Canteens should not be held to be a part of Ministry of Defence.
On behalf of Union of India the jurisdiction of the Tribunal was assailed on the ground that these employees cannot be held to be the Government employees and consequently the Tribunal did not have the jurisdiction to entertain the applications and decide the grievances of the employees. According to the Union of India the Unit-Run-Canteens are operated by the non-public funds and the expenditure required to run the Unit Canteens is made out of the profits earned by the canteens itself and, therefore, so far as the personnel serving in such canteens, there is no relationship of master and servant between the Government of India and the employees, and consequently the applications before the Tribunal should be rejected. The Central Administrative Tribunals, however, at Jodhpur and Bombay took the view that the Unit-Run-Canteens are the part of Defence establishment and consequently the holder of a post in the management of such canteen must be held to be connected with the Defence Services. The Tribunals examined the relevant provisions made by different personnel providing all pervasive control with the Ministry of Defence and thus held that there subsist master and servant relationship between the employees serving in Unit-Run- Canteens and the Ministry of Defence and, therefore, the Tribunal retains the jurisdiction to entertain applications and decide those applications in accordance with law.
Judgment
Counsel appearing for the Union of India vehemently contended that these Unit-Run- Canteens are different from the Canteen Stores Department and the salary of the employees serving in the Unit-Run- Canteens are not paid out of the Consolidated Fund of India but a fund created at the unit level and profit out of sales in Unit and Canteens are utilised for the payment of salary as well as for creating assets of the canteens, and consequently it is not possible to hold that there exist relationship of master and servant between the employees serving in these canteens and the Union of India in the Ministry of Defence. It was further contended that no doubt, some amount of control is vested with the local defence personnel, be it Army, Air Force or Navy, over the employees serving in Unit-Run-Canteens, but conferment of such disciplinary control alone will not clothe the employees with the status of Government servant or servants under the Ministry of Defence and the Tribunal, therefore, committed serious error in declaring the status of these employees as Government servants. The counsel relied on the case of Union of India and Another vs. Chotelal and others (1999) 1 Supreme Court Cases 554, in which case this Court has held that the Dhobis in the National Defence Academy, Khadakwasla are not Government servants, particularly because their salary is not paid out of the Consolidated Fund of India. The counsel for the appellant also pointed out that the Administrative Tribunals at Allahabad and Punjab and Haryana High Court at Chandigarh have taken contrary view so far as the status of these Unit-Run- Canteens employees are concerned, and according to the learned counsel that constitutes a correct view.
Counsels on behalf of the respondents contended, that the Central Administrative Tribunals at Jodhpur and Bombay have taken the correct view with regard to the status of such employees. According to them the decision of this Court and the test indicated in the Life Insurance Corporation case would fully apply to the facts and circumstances of the present case and, as such, there will be no reason to hold that the employees in the Unit-Run-Canteens are not the Government servants.
Observations by the Hon’ble Supreme Court-
The court observed that in the Defence Services there are two types of canteens; (1) Canteen Stores Department, and (2) Unit-Run-Canteens. The Canteen Stores Department was in existence in this country even during pre- independence days and it has its Head Office and Base Depot in Bombay with 33 Area Depots all over the country. These Area Depots are the wholesale
outlets, which serve Unit-Run Canteens in their respective zones.
It goes without saying that from 1948 onwards the Canteen( for short CSD) functioned as a department under the Ministry of Defence, initially for three years on an experimental basis, and later from 1950 on a permanent basis and yet right upto 1977 the legal status of the same remained nebulous. For functional purposes, it was a commercial undertaking, but for actual practice it was treated as a Department of the Ministry of Defence A set of Rules regulating the terms and conditions of service of the employees of Unit-Run canteens have been framed which confers all pervasive control over the employees with the authorities of Defence services. Though the funding of the Unit-Run Canteens is not made out of the Consolidated Fund of India but it is made by the Canteen Stores Department and this Department it its turn has formed a part of the Ministry ofDefence, admittedly.
In Parimal Chandra Raha and others v. Life Insurance Corporation of India and others – 1995 Supp. (2) Supreme Court Cases 611, the employees of different canteens in different offices of the Life Insurance Corporation whether were employees of the Corporation itself was under consideration by this Court. This Court evolved four principles which are quoted hereunder :-
- Canteens maintained under obligatory provisions of the Factories Act for the use of the employees became a part of the establishment and the workers employed in such canteens are employees of the management.
- Even if there is a non-statutory obligation to provide a canteen, the position is the same as in the case of statutory canteens. However, if there is a mere obligation to provide facilities to run a canteen, the canteen does not become part of the establishment.
- The obligation to provide canteen may be explicit or implicit. Whether the provision for canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts and circumstances in each case.
- Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment, whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the employees who avail of the service, the length of time for which the service has been continuously available, the hours during which it is available, the nature and character of management, the interest taken by the employer in providing, maintaining, supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the service available etc.`
The officers of the Defence Services have all pervasive control over the Unit-Run Canteens as well as the employees serving therein. Regular set of Rules have been framed determining the service conditions of the employees in Unit-Run Canteens. The funding of articles are provided by Canteen Stores Department which itself is a part of the Ministry of Defence. The report of a Committee of Subordinate Legislation went into detail the working conditions of the employees engaged in the Unit-Run Canteens and categorically came to the conclusion that these employees are recruited, controlled and supervised by the Rules and Regulations made by the Defence Services although these have been given the name of Executive Instructions. The said Committee came to the conclusion that for all intent and purposes the employees in the Unit-Run Canteens are Government employees and should be treated as such.
In the aforesaid premises, the Hon’ble court was of the opinion that the status of the employees in the Unit-Run Canteens must be held to be that of a government employee and consequently the Central Administrative Tribunal would have the jurisdiction to entertain applications by such employees under the provisions of Administrative Tribunal Act.
Therefore,
- Civil Appeal Nos. 1039-1040 of 1999 by the Union of India against the order of the Central Administrative Tribunal, Jodhpur Branch in O.A. No. 86 of 1995 accordingly stood dismissed.
- Civil Appeal No. 1041 of 1999 is Unions appeal against the decision of Central Administrative Tribunal, Jodhpur Branch in O.A. No. 157 of 1993 and OA No. 333 of 1994. As already stated, the court had come to the conclusion about the status of the employees serving in Unit-Run Canteens to be that of Government servants, but that by itself ipso facto would not entitle them to get all the service benefits as is available to the regular government servant or even their counter parts serving in the CSD Canteens. It would necessarily depend upon the nature of duty discharged by them as well as on the Rules and Regulations and Administrative Instructions issued by the employer. The court held that these employees of the Unit-Run Canteens will draw at the minimum of the regular scale of pay available to their counter parts in the CSDI and, further directed the Ministry of Defence, Union of India to determine the service conditions of the employees in the Unit-Run Canteens at an early date, preferably within six months from the date of this judgment.
- Civil Appeal Nos. 1042-43 of 1999 by the Union of India is directed against the order of the Central Administrative Tribunal, Jodhpur Bench in OA No. 231 of 1994, whereunder the Tribunal has directed the Union Government to review the payment of subsistance allowance payable to the employees in the light of the E.F.R. 53 of the Fundamental Rules. Notwithstanding the fact that the court recorded the conclusion that the employees serving under Unit-Run Canteens could be treated as Government servants, but that does not necessarily mean that the service conditions of such employees are governed by the Fundamental Rules. It would be open for the employer to frame separate conditions of service of the employees or to adopt the Fundamental Rules. There is no decision of the employer that Fundamental Rules would be applicable to such employees and in the absence of such decision the Tribunal was not justified to direct that the question of payment of subsistance allowance should be reviewed in accordance with the provisions contained in the Fundamental Rules. In this view of the matter, though the Supreme Court upheld the jurisdiction of the Tribunal to entertain applications filed by employees serving in Unit-Run Canteens but the impugned direction for reviewing the payment of subsistance allowance in terms of Fundamental Rules cannot be sustained and that part of the direction accordingly stands set aside and Unions appeal to that extent stands allowed.
Decision
Appeal was disposed off after making the observations as stated above.
Shubham Shandilya, IVth Year, B.B.A. LL.B., Symbiosis Law School, Pune